Telkom SA SOC Limited. JSE: TKG

Background of Telkom

With a history stretching back to 1991, Telkom SA is today South Africa’s leading communications services provider, boasting over 3.5 million telephone access lines and over a million internet ports, servicing business, residential and payphone customers. The group offers an extensive range of products and services for sale, covering the full telecommunications spectrum, including fixed-line retail voice services, equipment rental and sales services, interconnection services, dataservices, data centre operations and mobile and online services. The group’s structure consists of Telkom SA SOC Limited and wholly owned subsidiaries Business Connexion Communications and Swifnet. Operations are split into the Retail, Enterprise and Openserve divisions.

The group recorded revenue of R37 billion in 2016 and employs more than 20 000 people. Telkomshares are listed on the Johannesburg Stock Exchange (JSE) with a market cap of R31 billion. Telkom share price has underperformed on the JSE of late.

Telkom Shares Growth Driver

With a move to buy leading IT outsourcing company Business Connexion, along with higher mobile data revenue, fixed line subscription revenue and equipment sales, Telkom managed a strong performance in 2016, growing operating revenue by 13.9% and increasing after-tax profit from R3 billion to R4 billion. This followed several years of hampered results due to increased competition and lower consumer demand, which forced the company to decrease employee headcount.

Growth has also been driven by a focus on increased digitisation and enhanced mobile and internet offerings. This is all part of an extensive turnaround strategy to de-risk the mobile business, manage traditional revenue decline and improve operational and capital efficiencies. In the face of declining voice and subscription revenues, mobile data has proven to be an effective profit turner, with the group’s LTE service enjoying off the chart growth. The number of active mobile subscribers grew by 23% to 2.7 million, with broadband subscribers growing by 2.2% to just over 1 million.

Capital expenditure for the year increased to R6.1 billion, with a particular focus on investment in the new Fibre internet service, LTE, Mobile, IT systems, maintenance and rehabilitation. The group is planning to aggressively roll out its fibre network in the coming years, with a forecast of significant revenue contribution in future. Overall, Telkom shareholders enjoyed a 12.2% increase in headline earnings per share for the year, as well as a 10% increase in dividends.

Telkom Group Investor Tip

Telkom shares have had a mediocre run on the JSE in recent years, but the group’s successful turnaround strategy and renewed business model appear to have
strengthened the company. Investors are still slightly reluctant to buy Telkom shares, as the business is in a transition phase with an uncertain company. Much will hinge on the success of the group’s fibre rollout and continued investment in mobile offerings, as fixed-line revenues continue to decline. Telkom share price has been fairly stagnant during the turnaround phase, but the stocks could prove to be a savvy buy in the long-term.

Telkom Major Shareholders

The Government of the Republic of South Africa, Government Employees Pension Fund

Sector

Telecommunication Services

Industry

Telecommunication Services

Sub industry

Telecommunication Services

How to buy TelkomGroup Shares

Telkom : How to buy Telkom Group Shares Online

We have made it simple to buy JSE listed firm shares online. The easiest way to buy Telkom shares or stocks is to; start by submitting the ‘BUY THIS SHARE’ form. Next, one of our experienced and certified stock brokers will personally get in contact with you to discuss your custom stock request. Finally, a stock advisor will confirm the amount of shares you are looking to invest in Telkom Holdings and assist you with the setup and management of your stock portfolio account.

Here are the steps you must follow to Buy / Telkom Group shares with utmost confidence:

Start by Filling in the BUY THIS SHARE form.

Insert your name, email, telephone number and monthly remuneration.

Then, Indicate the amount you are looking to invest in Telkom.

Click the “ INVEST NOW” button

Once we have received your info, a dedicated stock advisor will personally call you back to discuss your personal share request.

Lastly, your newly appointed personal stock advisor will handle all account setups and reporting as stipulated by the financial services board of South Africa (FSB)

Buy Shares with Confidence

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